Analyzing the Performance of Local Government in Mexico: A Political Explanation of Municipal Budgetary Choices

Carlos Moreno

University of California at San Diego, Center for U.S.-Mexican Studies from Center for U.S.-Mexican Studies, UC San Diego

Abstract: This paper analyzes the budgetary choices of municipal governments in Mexico. Using a panel data approach that includes most municipalities in the country throughout the 1990-2001 period, I investigate to what extent local democracy has stimulated municipal governments to increase their investments on basic infrastructure projects, rather than expanding their bureaucratic apparatuses. My findings suggest that only under a decentralized policy setting, the competitiveness of the electoral arena has a positive influence on the provision of local public goods. I also find evidence that basic infrastructure spending increases when local elections are held, and when the local mayor belongs to a different party than the state governor.

Date: 2005-01-19
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